PM assesses new stage of Ukraine-IMF talks as very positive

November 06, 2011, 15:36 UTC+3“The sides have found mutual understanding virtually on all questions during another appraisal of implementing the cooperation programme between Ukraine and the IMF,” Azarov.....

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KIEV, November 6 (Itar-Tass) — Ukrainian premier Nikolai Azarov appraises a regular stage of talks with the International Monetary Fund (IMF) as very constructive, reported the government press service this week.

“The sides have found mutual understanding virtually on all questions during another appraisal of implementing the cooperation programme between Ukraine and the IMF,” the premier said.

According to press reports, the IMF mission noted that Ukraine’s economic indicators show positive dynamics. The sides also discussed prospects for 2012, problems that can pop up before Ukraine and the region within a short period in connection with the situation in the world economy and in financial markets, as well as the policy and reforms, necessary for stable restoration of the country’s economy in the mid-term perspective.

The press service notes that the Ukrainian government shares the concern of the IMF mission over possible deterioration of the foreign situation over the deceleration of the global economy. To minimize the aftermaths of an expected crisis, the cabinet conducts systemic work on introduction of programmes to replace imports, to root up Ukrainian goods on new markets, to enter free trade zones, to limit borrowings, etc.

The government wants to continue the discussion of measures with IMF representatives, necessary for completing the second review in the framework of the “stand-by” agreement. The government and the IMF continue now consultations on possible scenarios of economic situation development in the mid-term perspective, taking into account, above all, the situation, shaping up in the European Union as well as possible results of talks with Russia on cutting the price for gas, the press service noted.

IMF permanent representative in Ukraine Max Allier said on Friday that the fund’s mission that worked in the country between October 25 and November 3, decided to make an interval in the talks with the Ukrainian authorities. It was supposed that by the results of the visit, the mission was to recommend that the IMF board of directors should complete the review of the programme on the “stand-by” agreement and to issue Ukraine a regular tranche.

The cooperation programme, approved in July 2010, provides for appropriating 16 billion US dollars for Ukraine. The term of the programme’s action is 2.5 years. Money is given under the interest of 3.5 percent per annum.

Right after approving the cooperation programme, Ukraine received the first tranche of 1.89 billion dollars. The IMF board of directors took a decision on granting the second tranche of 1.5 billion dollars on December 22, 2010. However, the money has not been received up to this time.

The Ukrainian government prods the IMF to give two tranches of 1.5 billion dollars each by the yearend. Government officials claim that the borrowings will be channeled to reserves of the Ukrainian National Bank.

Ukraine needs IMF money, above all, to underpin the exchange rate of the national currency unit – the grivna. Ukraine is in the red with its balance of trade and a relatively high level of demand for foreign currency to pay for Russian gas.

Requirements by the IMF to Ukraine include higher charges for gas and heat supplies.